The U.K. retail sector is feeling the heat as inflation hits levels not seen in over 30 years amid turmoil rocking the British government.
On Friday, a corporation tax cut promised by new U.K. Prime Minister Liz Truss was reversed after she fired finance minister, Kwasi Kwarteng.
Truss’ administration has faced criticism over Kwarteng’s budget plans overhauling the nation’s economic policy. The plan’s call for unfunded tax cuts and guaranteed energy prices resulted in the British pound essentially collapsing against the dollar.
Jeremy Hunt was named the new chancellor of the Exchequer, or treasury. What’s more, corporate taxes would rise by 18 billion pounds ($20 billion) in lieu of the promised cut, Truss said. The increase to 25 percent from 19 percent, which was legislated under Johnson’s administration, takes effect in April and would would help pay for other tax cuts.
Retailers have been pushing for tax relief on business rates, which is tied to their right to occupy commercial property, and usually equals about 50 percent of annual rent.
Meanwhile, retailers are still acquiring new targets and opening stores to grow their market presence.
Frasers buys bankrupt Sneakerboy
Frasers Group acquired bankrupt luxury footwear retailer Sneakerboy Group under undisclosed terms.
Selling sneakers for $1,000 and up, the Australian luxury brand collapsed into administration in July and wanted to find a buyer so it could repay creditors. It couldn’t be determined if there would be enough money from the sale to pay secured creditors. Unsecured creditors aren’t expected to get anything from the deal.
Frasers has been on an acquisition spree, recently taking additional shares of Australia’s global fashion marketplace MySale for a 45 percent stake.
JD Sports acquires Deporvillage
JD Sports Fashion Plc said on Friday that its Iberian Sports Retail Group subsidiary has taken an additional 18 percent holding in Deporvillage SL, Spain’s No. 1 online sports retailer, from co-founders Xavier Pladellorens and Àngel Corcuera for 19.8 million euros ($19.3 million). The deal gives Iberian a 98 percent ownership interest in Deporvillage. JD’s initial 80 percent stake in Deporvillage closed in August 2021.
Pladellorens and Corcueva, who founded Deporvillage in 2010, retain a 2 percent stake and will transition away from managing the business, which also has a presence in Italy, Portugal and France.
JD owns a 50.02 percent stake in Iberian, its holding company in Spain.
Mango adds three UK stores
The Spanish fast fashion chain Mango aims to bring its total U.K. store count to almost 50 by the end of the year.
Mango opened a location in Dartford’s Bluewater shopping center last month and a new store on Friday in London’s Battersea Power Station shopping center. The third store will open in November in Newcastle’s Eldon Square shopping center. The new stores add to Mango’s physical presence across shopping centers, standalone stores and department store shop-in-shops.
Mango said the 300-square-meter (3,229 square feet) Battersea location will exclusively stock its Woman collection. The store will create more than 15 new jobs and feature Mango’s fresh Mediterranean-inspired, New Med retail concept.
“The opening of these three stores is part of the expansion plan we are promoting to consolidate our brand in the country and a step forward in our strategic goals for international expansion and our distribution ecosystem,” Daniel Lopez, Mango’s global expansion director, said. “The United Kingdom is a key market for Mango and one of the most important for the fashion industry in the world, and we want Mango to have a significant presence in it.”
Mango has been in the U.K since 1998, and last year opened a new Oxford Street flagship store.
The fast-fashion chain also plans to open more than 70 new locations in France by 2025 for a 300-store network there.
Gilly Hicks opens first store in Ireland
Gilly Hicks opened its first location in Ireland with a new store in Belfast.
The Gen Z-friendly brand, which is part of Abercrombie & Fitch Co.’s Hollister division, opened in the Irish city’s Victoria Square as part of its expansion in Europe after it opened a German store this year adding to its presence on London’s Carnaby St.